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AssetLock™ is a portfolio monitoring system, which identifies a client’s maximum portfolio downside or loss and indicates that immediate action is required in order to limit losses per the clients pre-determined risk tolerance. It is not an actual stop loss, and may not automatically sell the individual securities in the portfolio. Therefore, the AssetLock™ Value is a reference point to encourage a conversation between Creative Retirement Planning, LLC and the client, and to determine if the client/s would like to liquidate the portfolio and move the assets into cash, reset the AssetLock™ percentage, or reallocate to a different risk profile. Investing entails risks, including possible loss of principal. The use of tools cannot guarantee performance. Past performance is no guarantee of future results.

Mr. Tetley is a Registered Investment Advisor and licensed insurance agent with comprehensive knowledge of retirement, wealth enhancement, and estate planning issues. Ron is a well-known financial educator in Akron, Ohio. Since 1994, Ron has specialized in helping individuals avoid common, costly financial mistakes. The majority of his time is spent meeting with prospective and established clients. Ron resides in Wadsworth, Ohio with his wife Teresa and together, they have four children.

Big companies, big products, big sales should be the maxim for 2017. Companies like Apple, Amazon, Google (Alphabet) and Facebook have seen profits soar and double-digit gains in their stock prices as their market values have become gargantuan. Amazon’s CEO, Jeff Bezos, has become the richest man in the world this year as a result.

In 2016, from November 8 to year end, the S&P 500 grew by 5.0 percent while the Russell 2000 returned 13.9 percent. In October of this year, the S&P was up 2 percent while the Russell 2000 had lost a percent. Year to date, through November 10, the Russell 2000 is up less than nine percent this year. Contrast that with the S&P 500, which through mid-November, has grown by more than 15 percent.
From November 4, 2016, through November 26, 2017, the S&P has not fallen 3 percent in any day. The CBOE Volatility Index (VIX), a measure of market expectations for near-term volatility as measured by S&P 500 stock index options prices, hit an all-time low on November 24.

The Russell 2000 is an index of approximately 2,000 small-cap stocks that are part of the Russell 3000 Index. The average weighted market capitalization of those companies is about $1.3 billion. The S&P 500 Index, on the other hand, is an index of 505 stocks of companies with market capitalizations of at least $6.1 billion. It is one of the most cited benchmarks of the U.S. stock market.

So, why the discrepancy in performance between these large company and smaller company stocks?

The 30 largest stocks in the S&P, at the beginning of the year, have accounted for 50 percent of the index’s gains through mid-November.

In addition to the previously mentioned stocks, this groups includes Microsoft, Berkshire Hathaway, Exxon and Johnson & Johnson. Because of gains in these stocks, as well as those tech company leaders, the overall performance has been remarkable.
Because of the explosive performance of many of these mega-sized tech firms, the performance of the large cap domestic sector, in comparison to it’s small-cap brethren is a study in contrasts and a reversal of some previous trends.
This trend has been most notably in the sector that includes the massive large-cap tech stocks. Other sectors have not fared as well. When you compare the Russell 2000 Index to the S&P Utilities Sector instead, you find 12-month returns, through August 3, with the small caps significantly ahead. (17.5 percent vs. 8.5 percent).

Large Caps as a Haven

There has also been a flight to quality and safety since the 2008 financial crisis. That meant that many more investors redirected funds to large cap stocks. This shift represents many geo-political uncertainties that have seen investors remain in equities but shift their weighting to larger company stocks.

While large-cap companies will benefit greatly by a corporate tax cut, small cap companies would benefit by tax reform as well. The small-cap companies would also benefit by deregulation, although that appears to be showing up first in job numbers more than stock performance.

Washington may hold to key to the current trajectory of all markets. Only time will tell.